Stock Analysis

What Type Of Shareholders Make Up Orient Precision Industries Inc's (KOSDAQ:065500) Share Registry?

KOSDAQ:A065500
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If you want to know who really controls Orient Precision Industries Inc (KOSDAQ:065500), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

With a market capitalization of ₩136b, Orient Precision Industries is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased shares. Let's delve deeper into each type of owner, to discover more about Orient Precision Industries.

See our latest analysis for Orient Precision Industries

ownership-breakdown
KOSDAQ:A065500 Ownership Breakdown January 15th 2021

What Does The Lack Of Institutional Ownership Tell Us About Orient Precision Industries?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Orient Precision Industries' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

earnings-and-revenue-growth
KOSDAQ:A065500 Earnings and Revenue Growth January 15th 2021

Hedge funds don't have many shares in Orient Precision Industries. O'Reilly Automotive, Inc. is currently the company's largest shareholder with 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 30% and 6.6% of the stock. Additionally, the company's CEO Jae-Jin Jang directly holds 6.4% of the total shares outstanding.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Orient Precision Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Orient Precision Industries Inc. It has a market capitalization of just ₩136b, and insiders have ₩8.8b worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a 25% stake in Orient Precision Industries. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 30%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

Public companies currently own 39% of Orient Precision Industries stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Orient Precision Industries better, we need to consider many other factors. For instance, we've identified 2 warning signs for Orient Precision Industries (1 is significant) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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